A study on the way the European insurance industry is being affected by floods and the corresponding responses

Abstract

It is evident from secondary research that floods are increasing in certain areas in Europe. There is further evidence, which shows that such an increase has been affecting the European insurance industry. Therefore, the purpose of this study is to discover the response of the insurance industry in Europe, in relation to the increase of floods in Europe as defined in the introduction. In addition, this paper explains how this has and will affect many European insurance companies. Thus, this study stresses the increasing importance of why insurance companies in Europe should take certain mitigation measures before accepting flood risks. In order to achieve the desired objectives, the researcher of this study distributed a close-ended questionnaire, which included statements, ranked on a Likert-scale and tick-in-the-box questions. These were sent to various general European insurers in the period between 28th February 2016 and 20th March 2016. The general findings evidenced that many European insurers believe that floods are increasing and that this is in fact, of a threat to their insurance companies. The insurance companies on test, have seen many internal and external changes to their insurance company. However, it remains that the majority of the surveyed insurance companies believe that more needs to be done to tackle the flood risk more efficiently, from the European insurance industry. The study concludes that although the most dominant percentage of surveyed insurance companies are putting their efforts to include flood risk assessments, there is still a considerable percentage that do not make use of such measures. Moreover, many believe that the current risk assessment would remain reliable for the forthcoming decade, however it is highly suggested that these should be regularly updated to take into account new trends and data.